PRENEED CEMETERY RECEIVABLES

Preneed sales of cemetery interment rights and related products and services are usually financed through interest-bearing installment sales contracts, generally with terms of up to five years with such interest income reflected as Preneed cemetery finance charges. In substantially all cases, we receive an initial down payment at the time the contract is signed. At September 30, 2014, the balances of preneed receivables for cemetery interment rights and for merchandise and services were $23.5 million and $9.3 million, respectively, of which $10.2 million is presented in Accounts receivable and $22.6 million is presented in Preneed receivables. The unearned finance charges associated with these receivables were $3.8 million and $4.4 million at December 31, 2013 and September 30, 2014, respectively.

We determine an allowance for customer cancellations and refunds on contracts in which revenue has been recognized on sales of cemetery interment rights. We have a collections policy where past due notifications are sent to the customer beginning at 15 days past due and periodically thereafter until the contract is cancelled or payment is received. We reserve 100% of the receivables on contracts in which the revenue has been recognized and payments are 90 days past due or more, which was approximately 5.9% of the total receivables on recognized sales at September 30, 2014. An allowance is recorded at the date that the contract is executed and periodically adjusted thereafter based upon actual collection experience at the business level. For the nine months ended September 30, 2014, the change in the allowance for contract cancellations was as follows (in thousands):



	September 30, 2014
Beginning balance	$	1,347
Write-offs and cancellations	(959		)
Provision	1,414
Ending balance	$	1,802

The aging of financing receivables as of September 30, 2014 was as follows (in thousands):



	31-60 Past Due		61-90 Past Due		91-120 Past Due		>120 Past Due		Total Past Due		Current		Total Financing Receivables
Recognized revenue	$	816	$	421	$	263	$	1,113	$	2,613	$	20,555	$	23,168
Deferred revenue	347		183		158		556		1,244		8,368		9,612
Total contracts	$	1,163	$	604	$	421	$	1,669	$	3,857	$	28,923	$	32,780

The aging of financing receivables as of December 31, 2013 was as follows (in thousands):



	31-60 Past Due		61-90 Past Due		91-120 Past Due		>120 Past Due		Total Past Due		Current		Total Financing Receivables
Recognized revenue	$	895	$	372	$	266	$	683	$	2,216	$	18,628	$	20,844
Deferred revenue	355		191		85		271		902		7,890		8,792
Total contracts	$	1,250	$	563	$	351	$	954	$	3,118	$	26,518	$	29,636